FTC staff: US should sue Google for misuse of standards-based patents

Android defendants have relied on such patents in smartphone patent wars.

In a decisive twist to the sprawling smartphone wars, it appears the government intends to sue some of the participants over their use of patents. The first targets won't be the companies that initiated the battles, though—companies like Apple, Kodak, and Microsoft that have gone on the offensive. Instead, it looks like Google and possibly Samsung could be the targets of government lawsuits. Staffers at the Federal Trade Commission (FTC) have formally recommended the government bring an antitrust lawsuit against Google, according to sources cited by Bloomberg. Now FTC commissioners will have to decide whether to whether to act on that recommendation. A decision will likely come after the presidential election on November 6.

The problem is Google's use of so-called standards-essential patents. Those are patents it has already disclosed to a standards-setting body as being important to the functioning of some type of technology standard.

If Google ends up being on the business end of a government lawsuit because of smartphone patents, it would be surprising, mainly because Google isn't the company that actually initiated the whole brouhaha. The smartphone patent battles were mainly kicked off by Apple and Microsoft, seeking royalty payments from Android phones, as well as legacy companies that aren't really active in the space, like Kodak.

It's the Android defendants who have tended to hit back with industry-standard patents, as defensive actions in these suits. Samsung did that during its big trial with Apple, but lost. And when Motorola was under patent attack by Microsoft, it used standards-based patents to counterattack; Google decided to keep up that litigation after buying Motorola, and that's apparently what has it in trouble.

The problem with standards-based patents is that companies typically agree to license them on "fair, reasonable, and non-discriminatory terms." The government is apparently concerned that seeking outsized royalty payments in court could violate those agreements.

Judges have shown concern about use of these patents, too. The Motorola counter-attack will be under scrutiny at a special trial in Seattle later this month, where a federal judge will likely set the maximum rates the company can ask for. In Chicago, Judge Richard Posner threw out a patent lawsuit between Apple and Motorola earlier this year, in part because he was unimpressed with Motorola's use of standards-based patents.

Between government investigations and judicial skepticism, it looks like the particular form of patent "ammunition" Android makers are using may end up being severely hampered. The effect could be even more focus on user-interface and feature patents on both sides.

This is actually the second antitrust action against Google in the works from the FTC. Reports emerged last month that four of five commissioners favor taking a separate antitrust action against Google over its search results. Samsung is also under antitrust scrutiny over its use of patents; that investigation is being handled by the Department of Justice, according to the Bloomberg report. Antitrust enforcement is an area where the DOJ and FTC have traditionally split up the work.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

Seems the older manufacturers played nice so everyone could use 3G and cell technology. The basic functionality of Android, iOS, Windows are close to the same and none of these "patents" are even the real reason people buy the phone in the first place.

"Hey thanks for that cheap $1/device patent that if we could not have our phone would not work to make cell calls or get data. Now here are all our obscure patents that probably should not have been granted in the first place that have no impact on how your device functions expect for one thing that everyone does by default because its common sense to every programmer. Pay us $20/device please and thank you."

The sad thing is the people who actually did the hard work and solved real physical world problems are not only being smacked down but may actually face anti-trust lawsuits because they lacked the foresight to patent ALL THE THINGS!

Software patents (of any stripe) are a joke, and it's telling that certain players have nothing but software patents to show off.

What's the recourse for a company that exposes themselves to a FRAND burden when other players cannot come to an agreement with them on what constitutes Fair, Reasonable and Non-Discriminatory pricing?

And they're taking action, not against the defendants that used FRAND patents in their defensive countersuits, but against the OS vendor that was not involved in the suits.

They would be suing Google because they own Motorola and Motorola did some crazy stuff with their FRAND Patents. Just because they where bought, doesn't mean that they are not liable for their actions anymore.

This is a good thing! I really think it's crappy when companies use standard essential patents for injunctions. It makes the whole notion of creating standard useless.

Its also crappy when companies that are guaranteed the right to negotiate sue instead, saying that the price is unreasonable. From what I have seen, cross licensing is the usual means of dealing with these types of issues. The question you should be asking is why Apple and Microsoft refuse to cross license. We saw this in the Nokia/Apple case. Nokia was looking for cross licensing, Apple refused.

Also, how long have Apple and Microsoft been using the patents without a license?

EDIT: My theory on the cross licensing is that cross licensing can not be used to prevent competition.

Wow. Longtime reader who has never felt the need to post before. I just enjoy the thoughtful reporting and discussion here on Ars. But as someone who has no particular allegiance to any party in these ugly and ridiculous patent wars, I do feel I have to say:

I am very disappointed at the poor quality and obviously biased writing of Joe Mullin. His obvious favoritism for the "Android Cause" (or alternatively, distaste for Apple, not sure which) is both irresponsible and detrimental to Ars reputation as an impartial arbiter of technology news and analysis.

His painful attempts at justification, minimization and rationalization in both the language and "analysis" of the article on behalf of Google's interests should have been caught and corrected by the Ars editorial staff before this was published. I would also like to note that this is not the first time I have noticed this bias in one of Joe's articles - this is simply one of the most tortured and blatant.

Actually Google and Samsung DID initiate the whole brouhaha by stealing. That they would continue abusive behavior by misusing standards patents should come to no surprise given their abusive tendencies. That is of course if you don't still believe in the Do No Evil bull crap they sell. Im sure Google fans will find away to justify their actions of absusing FRAND patents none the less.

The sad thing is the people who actually did the hard work and solved real physical world problems are not only being smacked down but may actually face anti-trust lawsuits because they lacked the foresight to patent ALL THE THINGS!

Exactly, it's ridiculous that companies like Apple who did all the hard work to pull smartphones out from the dark age is being sued because they used standard essential patents that should've been licensed when they bought the chip from the manufacturer. Instead companies like Samsung decides to pull the license last minute and tries to double dip on their patents.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

[quote="Sufinsil"]If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

Because you don't actually NEED Apples patents to make a phone work. That people steal Apples innovations and ideas because they are good does not mean there are not other choices as good if not better, i.e. Microsoft Windows Phone and Metro.

The patents Google and Moto are abusing are required to have a working 3G phone and they already agreed to license them on FRAND terms so that they would become standards. Apple did not as is that their right to choose to do so.

f Google ends up being on the business end of a government lawsuit because of smartphone patents, it would be surprising, mainly because Google isn't the company that actually initiated the whole brouhaha. The smartphone patent battles were mainly kicked off by Apple and Microsoft, seeking royalty payments from Android phones; as well as legacy companies that aren't really active in the space, like Kodak.

Actually I seem to remember Motorola kicking off thier lawsuits with MS and Apple. I could be wrong, but I thought they filed first when negotiations broke down.

I

Quote:

t's the Android defendants who have tended to hit back with industry-standard patents, as defensive actions in these suits. Samsung did that during its big trial with Apple, but lost. And when Motorola was under patent attack by Microsoft, it used standards-based patents to counterattack; Google decided to keep up that litigation after buying Motorola, and that's apparently what has it in trouble.

Even if they are on the defensive, there are rules and Motorola is not playing by them. Just because someone is in a defensive position does not give them the rigth to stop following their previous obligations.

The tone of this article is incredibly biased. At what point will Ars recognize that maybe when the courts keep ruling one way, when the government keeps taking action, and when everyone else in the industry is saying one thing that perhaps, just perhaps, Google and their partners did something wrong? Maybe? Just a tiny bit?

I thought Nokia and Motorola started the patent battles (or at least the most recent round, since patent battles have long been a part of the technological landscape). But perhaps that fact would be a little inconvenient for Mr Mullin and the narrative he's trying to concoct. How about an article on why abusing standards essential patents is a bad thing and would be a disaster for both the industry and consumers?

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

Seems the older manufacturers played nice so everyone could use 3G and cell technology. The basic functionality of Android, iOS, Windows are close to the same and none of these "patents" are even the real reason people buy the phone in the first place.

"Hey thanks for that cheap $1/device patent that if we could not have our phone would not work to make cell calls or get data. Now here are all our obscure patents that probably should not have been granted in the first place that have no impact on how your device functions expect for one thing that everyone does by default because its common sense to every programmer. Pay us $20/device please and thank you."

The answer to your question is quite simple: Because they are neither part of a STANDARD nor ESSENTIAL. The whole point of a STANDARDS ESSENTIAL patent is that it be part of a standard (e.g., the communications standards underlying cell phone wireless interoperability) and that without implementing these patents you can't adhere to the standard, hence they are essential.

Whether the types of things Apple or Microsoft have patented are worthy of patents, or even whether you think they've abused those patents is immaterial. None of those things are part of a standard and it is entirely possible to build smartphones without them.

Also, in exchange for offering standards essential patents on a FRAND basis, the patent holders are assured of getting some licensing revenues as part of a standard that everyone has to implement. The alternative is to refuse to offer those patents (nobody forced them to offer their patents on a FRAND basis, they did so voluntarily), in which case the standards body will simply choose another approach rendering those patents largely worthless.

Actually Google and Samsung DID initiate the whole brouhaha by stealing. That they would continue abusive behavior by misusing standards patents should come to no surprise given their abusive tendencies. That is of course if you don't still believe in the Do No Evil bull crap they sell. Im sure Google fans will find away to justify their actions of absusing FRAND patents none the less.

Pray tell what exactly did Google steal? Samsung has been found guilty of using six Apple patents. However, that trial has serious flaws in it that may get it over turned. Apple is using some of Samsung's patents and isn't paying for them either. Stop trying to make this one sided. There are issues going both ways.

I thought Nokia and Motorola started the patent battles (or at least the most recent round, since patent battles have long been a part of the technological landscape). But perhaps that fact would be a little inconvenient for Mr Mullin and the narrative he's trying to concoct. How about an article on why abusing standards essential patents is a bad thing and would be a disaster for both the industry and consumers?

It was Nokia to apple and apple lost. Then apple to HTC, HTC to apple, then Moto to to apple, and Moto to making apple's patents invalid. Then right after came apple to Moto.Then came the lawsuit storm of apple to samsung. Sometime in between is Microsoft to Moto for not paying up for their usual patents, then MS to Barnes and Noble.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

Thats my point. The people who invested and made up the cell technology played nice and submitted stuff as "Standard". It was easier and cheaper to develop infrastructure if everyone used the same tech. I think your consumer would notice if you phone could not act as a phone. "Bounce" or whatever obscure piece of programming no one notices. And to a programmer a lot of these things are common sense for them to program or similar things have be used decades ago. Cell tech is not something easy to do and took the right R&D and companies working together. Now if you had hoped every cell manufacturer used their own cell tech and each had to put up their own towers that are incompatible, each their own.

Apple and Android copying one another has been the best thing for consumers. Each get improvements from one another and they keep investing to make a better product. If Google Maps wasn't so good no one would have a problem with the current iOS maps and Apple would not be rushing at a frantic pace to fix it.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

Stolen by perhaps HTC, Moto and Samsung. However, stock google android does NOT use the bounce effect.

While perhaps apple is justified in fighting over that, their behavior in trying to stifle alternative lock designs in android is quite different. And in general terms apple claims to own the touchscreen only form factor (via released court docs from samsung vs. apple).

is being sued because they used standard essential patents that should've been licensed when they bought the chip from the manufacturer. Instead companies like Samsung decides to pull the license last minute and tries to double dip on their patents.

That's not what happened. Samsung never entered into a license agreement with Qualcomm. They entered into a "Do-Not-Sue" agreement with Qualcomm. When Apple sued, Samsung revoked the "Do-Not-Sue" agreement, then sued Apple for not acquiring a license.

As far as FRAND goes... FRAND does not gaurantee that everybody pays the same rate, it just says that you will not be denied licensing opportunity if you meet the published criteria. It also says will get a "reasonable" rate, which is negotiated. (Yes, I work in several standards bodies)

From what I heard, Apple never countered any offer from Samsung, they instead just refused. That is why Samsung sued. How can Apple claim they didnt' get a reasonable rate, if they did not *try* to negotiate?

Also, the initial offer of 2.5% may seem unreasonable, but it's actually typical in the groups I work in. The reason not everyone pays this rate, is because many companies have pre-existing cross-licensing agreements that include the same patents. Other times, it's because companies simply agree not to sue each other, and don't collect licensing at all. (It's when one breaks that understanding, that they get sued into oblivion) If you don't already have a cross-licensing agreement or any other type of agreement in place, then you have to negotiate the FRAND rate.

Also, one argument I've seen, is that Apple was asking $40 per device for their patents. Granted those patents aren't FRAND, but how do you establish what "reasonable" is? Obviously Apple thinks that Samsung paying $40 per device should be acceptable to them. If that is the case, then even if 2.5% applies to full retail (which it usually doesn't), would only amount to $15 per device. Less than half the price Apple was asking. But if Apple thinks this is not reasonable, then why would Apple expect Samsung to pay $40 per device for their non FRAND patent? If $15 is not reasonable, then $40 is outrageous. If $40 is reasonable/acceptable, then $15 is more than reasonable.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

Actually Google and Samsung DID initiate the whole brouhaha by stealing. That they would continue abusive behavior by misusing standards patents should come to no surprise given their abusive tendencies. That is of course if you don't still believe in the Do No Evil bull crap they sell. Im sure Google fans will find away to justify their actions of absusing FRAND patents none the less.

right... stealing, and Apple has made everything they have ever used completely by themselves, correct? Samsung and Motorolla abused FRAND to defend themselves against Apples rampage, I still think Apple was in the wrong for starting this, but everyone involved at some point has been ridiculous.

f Google ends up being on the business end of a government lawsuit because of smartphone patents, it would be surprising, mainly because Google isn't the company that actually initiated the whole brouhaha. The smartphone patent battles were mainly kicked off by Apple and Microsoft, seeking royalty payments from Android phones; as well as legacy companies that aren't really active in the space, like Kodak.

Actually I seem to remember Motorola kicking off thier lawsuits with MS and Apple. I could be wrong, but I thought they filed first when negotiations broke down.

I

Quote:

t's the Android defendants who have tended to hit back with industry-standard patents, as defensive actions in these suits. Samsung did that during its big trial with Apple, but lost. And when Motorola was under patent attack by Microsoft, it used standards-based patents to counterattack; Google decided to keep up that litigation after buying Motorola, and that's apparently what has it in trouble.

Even if they are on the defensive, there are rules and Motorola is not playing by them. Just because someone is in a defensive position does not give them the rigth to stop following their previous obligations.

The tone of this article is incredibly biased. At what point will Ars recognize that maybe when the courts keep ruling one way, when the government keeps taking action, and when everyone else in the industry is saying one thing that perhaps, just perhaps, Google and their partners did something wrong? Maybe? Just a tiny bit?

Except that the courts aren't all ruling one way. They are all over the place. And the only ones complaining are the ones unwilling to negotiate for the FRAND terms. Apple says that Samsung acted in "bad faith" with regards to its FRAND responsibilities. Yet the jury found that Apple offered absolutely no proof of this being true. Apple and Microsoft are trying to game the system using fluff patents to control a market where everyone else has FRAND patents.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

Because you don't actually NEED Apples patents to make a phone work. That people steal Apples innovations and ideas because they are good does not mean there are not other choices as good if not better, i.e. Microsoft Windows Phone and Metro.

The patents Google and Moto are abusing are required to have a working 3G phone and they already agreed to license them on no FRAND terms so that they would be standards. Apple did not as is there right.

It doesn't excuse Apple from using non-licensed patents, then expecting to pay the same amount as other companies who have cross-licensed patents while refusing to cross license any of their patents. There's no proof here that Google/Moto are abusing these patents because the case hasn't gone to trial. All we have is Apple saying that they are being asked to pay more than everyone else while completely ignoring the fact the everyone else negotiated in good faith.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

Thats my point. The people who invested and made up the cell technology played nice and submitted stuff as "Standard". It was easier and cheaper to develop infrastructure if everyone used the same tech. I think your consumer would notice if you phone could not act as a phone. "Bounce" or whatever obscure piece of programming no one notices. And to a programmer a lot of these things are common sense for them to program or similar things have be used decades ago. Cell tech is not something easy to do and took the right R&D and companies working together. Now if you had hoped every cell manufacturer used their own cell tech and each had to put up their own towers that are incompatible, each their own.

Apple and Android copying one another has been the best thing for consumers. Each get improvements from one another and they keep investing to make a better product. If Google Maps wasn't so good no one would have a problem with the current iOS maps and Apple would not be rushing at a frantic pace to fix it.

That's exactly what FRAND is for. If everybody is using your patent in a standard, FRAND prevents the patent owner from price gouging everybody after the standard has been adopted. Whether or not you think the "bounce back" patent should've been allowed to be patented in the first place because it's "obvious" is irrelevant -- just because something is "obvious" doesn't give you or anybody else the right to steal it.

If Microsoft and Apple can sue every other phone manufacturer for patent infringement for patents that everyone seems to use, why are these not standard essential also then?

The difference is that the patents you are referring to that were stolen by the likes of Google for use in Android (such as Apple's iOS "bounce" effect when you reach the top or bottom of a list, for example) were never submitted to any standard -- hence, they are therefore not "standard essential." Things like LTE, however, have been submitted as a technology standard.

Whether or not you think the "bounce back" patent should've been allowed to be patented in the first place because it's "obvious" is irrelevant -- just because something is "obvious" doesn't give you or anybody else the right to steal it.

Actually, in patent terms, it does. If something is deemed "obvious" it is not patentable. That's the whole point of the use of the word.

However, I'm pretty sure that the bounceback patent is being reviewed based on prior art, not obviousness.

This is a good thing! I really think it's crappy when companies use standard essential patents for injunctions. It makes the whole notion of creating standard useless.

True, but I worry that companies may draw the lesson that it's better just to sit on their patents, and not try to contribute to building future standards, which would seem to be an overall loss for the public. Law of unintended consequences, and all that...